E An Objective Look At Bitcoin; What No One Is Giving

As global markets have been caught up in a whirlwind of activity over the past week, Bitcoin (BTC) unsurprisingly proved to be a popular topic of conversation in the midst of it all. During the mayhem, the digital currency saw its price drop as low as $6,000, shredding as much as 70% of its nearly $20,000 valuation from back in December. At the time of writing, its price stands around $9,680 according to emerging cryptocurrency data tracking platform OnChainFX.com.

But a major problem with the general conversation regarding Bitcoin and all that’s associated with it is the lack of agnosticism within the dialogue. Too frequently people choose to play the binary game by either determining the leading cryptocurrency to be the financial messiah and flawless in design or dead on arrival and bereft of even potentially bearing any value to society.

Berkshire Hathaway Vice Chairman Charlie Munger, for example, just yesterday said, “I never considered for one second having anything to do with [bitcoin]. I detested it the minute it had been raised. The more popular it got, the more I hated it…Bitcoin is noxious poison.” A bit extreme, no? Denying consideration is also a great way to not know much about what you’re discussing.

In another instance, Bert Ely of the Hill published a piece called “Bitcoin is a Ponzi scheme, and it will collapse like one”, yet it simply cannot be a Ponzi scheme.

On the flip side, Evander Smart’s Evander Smart “How Bitcoin Blockchain and Ripple May Help Kill U.S. Dollar” is shortsighted in many ways too. And flip to Twitter, where cybersecurity expert John McAfee is betting big on Bitcoin hitting $1 million and other users are romanticizing about the imminent demise of central banks.

The issue here is that both extremes are typically spoken about as blanket statements with such heavy conviction that it leaves little room to actually dissect the unique and very separate elements of the technological asset which deserve much deeper scrutiny on an individual basis.

It is for this reason that I hope to offer a more objective take on Bitcoin as it stands today. It is not an inherent evil nor the manifestation of financial perfection. It’s a fintech development that took the world by storm, offering the globe fresh perspective on everything from money to data storage to human ideals. Condensing Bitcoin into being either simply “good” or “bad” or destined for “failure” or “success” serves its brief, yet fascinating history little justice. So, let’s explore its strengths and societal contributions, as well as its shortcomings and undesirable traits. By doing so, we paint a much more detailed picture of what Bitcoin is, and where it might be headed in the future.

As a Protocol

Back in November, I wrote about the “dramatic Bitcoin family” that the original Bitcoin protocol (now referred to as Bitcoin Core) and all its forks had collectively constructed. The issues touched on in that piece, namely the lack of consensus within the Bitcoin development team and scalability concerns, have only reinforced themselves since then, highlighted by the vicious Bitcoin Core vs. Bitcoin Cash (BCH) battle that has emerged with ardent supporters on either side and the promise of the Lightning Network’s ability to fix Bitcoin Core’s limitations.

It’s therefore difficult to pinpoint the future trajectory for Bitcoin a protocol because nobody really knows, or agrees on, its true identity. Is Bitcoin Cash as what Satoshi Nakamoto had in mind? Or is Bitcoin Gold (BTG) more in line with the project’s objectives? What about Bitcoin Diamond (BCD) or the recently hyped Bitcoin Private (BTCP)? Each fork is nuanced in its own way, varying in block size, transaction capacity, mining algorithms, and privacy initiatives. As all of these are critical matters for the cryptocurrency aiming to achieve extensive adoption, it’s too soon to say how the dust will settle. Until it does, though, Bitcoin Core is the protocol globally recognized as Bitcoin.